As a result of the financial and economic crisis many innovative small and medium sized businesses (SMEs) experience limitations in the start-up and the expansion phase due to lack of access to venture capital. The agreements aims to create better opportunities for venture capital and social entrepreneurship funds to raise capital across borders in the EU, ensuring that in the end more financing is channelled to innovative SMEs and social businesses.
Danish Minister for Business and Growth, Ole Sohn:
“With the agreement we will create an easy and simple set of rules for European venture capital and social entrepreneurship funds in the EU to avoid that they are subject to a number of national requirements in different Member States when they market their funds. The agreements will help European SMEs and social entrepreneurs across Europe to raise money more easily in order to boost growth in the EU.”
”I am happy that the Presidency has reached agreements with the European Parliament on three out of the twelve key initiatives in the Single Market Act. Thus we have strengthened the Presidency’s attempt of getting Europe back on a sustainable growth track.”
With the proposals venture capital and social entrepreneurship funds, whose total amount of assets do not exceed 500 million Euros, can obtain an “EU passport”. This means that if they fulfil a number of criteria, the funds can be marketed across borders in the EU without meeting additional national requirements. It will be optional for the funds administers whether they wish to take part in the arrangement.
The political agreements are to be finally adopted by the European Parliament and the Council and enter into force shortly after that.